An income tax return is considered “defective” if it is not filed as per the requirements of the Income Tax Law. If a taxpayer has filed a defective income tax return, the Assessing Officer (A.O.) will identify the defect and issue a notice under section 139(9) of the Income Tax Act. The taxpayer must then duly rectify the defective return within 15 days from the date of issue of notice. This article mentions the procedure for responding to income tax notice for a defective return u/s section 139(9).

What is Defective Return 139 (9)?

In the context of Indian income tax returns, a defective return under Section 139(9) refers to a tax filing identified by the Income Tax Department as incomplete or inaccurate. This can occur due to missing information, mathematical errors, or inconsistencies with tax regulations. To rectify such issues, the department issues a defective notice u/s 139(9), formally notifying the taxpayer of the discrepancies and requiring them to make corrections within 15 days of receiving the notice. Failing to address these defects within the stipulated timeframe can lead to potential penalties and complications in the future.

Why was a notice of defective return u/s section 139 (9) issued?

Notice of defective return can be issued with respect to the following scenarios:

• If the returns are not filed in the prescribed format provided by the Income Tax Department.
• Non-filling of any mandatory fields in the income tax return.
• The disparity between the name which is specified in the income tax return and that of the PAN Card has been observed by the Income Tax Department.
• Failure in submitting necessary evidence of tax in specified circumstances like claim over deduction or collection of tax, payment of advance tax and so on.
• Filing of returns without payment of tax.
• Filing of returns in ITR-4 instead of ITR-3. Returns must be filed in ITR-3 if presumptive income is less than 8% or 6% of gross turnover or receipts.
• Failure to attach a statement which depicts the computation of tax liability.
• Non-submission of audit reports, in cases requiring tax audit.
• Non-submission of books of accounts which are maintained, or failure to maintain the required books of accounts
• Failure to submit copies of the audited profit and loss account, balance sheet and auditor’s report.
• Failure to submit copy of audit report with the tax return.
• If the books of account are not maintained regularly, non-submission of Annual Gross receipts of business or profession, gross profit, pertinent expenses and the net profit of the business or profession.
• If the books of account are not maintained regularly, non-disclosure of the amount of total Sundry Debtors, Sundry Creditors, stock-in-hand and closing balance.

How Do I Receive and Open My Income Tax Notice?

The Income Tax Department will deliver your notice for a defective return u/s 139(9) electronically to the email address registered with them. The email subject line will clearly identify it as a “Communication under section 139(9)” for your specific PAN (Permanent Account Number) and Assessment Year. The email will contain a password-protected attachment housing the actual notice details. To access this attachment, the password is a combination of your PAN in lowercase letters followed by your date of birth in the DDMMYYYY format. For instance, if your PAN is XYZAB1234D and your date of birth is 05/01/2000, the password to open the notice would be “xyzab1234d05012000”.

What to do after receiving the notice of defective return u/s section 139 (9)?

Receiving a notice u/s 139(9) for a defective return requires prompt action. You have 15 days from the notice date to rectify the errors and submit a revised ITR. Alternatively, you can request an extension by submitting a written application to the Assessing Officer (A.O.). While exceeding the initial 15-day period is technically possible, the A.O.’s discretion determines if the delay is accepted and the return validated before the assessment.

How to give response to the defective return notice u/s section 139 (9)?

Step 1 – Login the Income Tax e-filing website: Go the Income tax e-filing website and enter your PAN or Aadhaar number and password.

Step 2 – Access the Defective Return Notice:

• Click on “Pending Actions” on the dashboard.
• Select “e-proceedings“.
• Look for the notice related to Section 139(9) and click on “Notice/Letter pdf” to view the details of the defect.

Step 3 – Understand the Defect and Choose Your Response:

• Read the notice carefully to understand the specific error or missing information identified.

Step 4 – Responding by Agreeing and Rectifying the Defect (Online Mode):

• If you agree with the error, select “Agree“.
• Choose “Offline utility” as the response mode.
• Download the provided JSON file containing your corrected return data.

Step 5 – Complete the Rectification Process :

• Use tax filing software to upload the downloaded JSON file. This will populate the return with the rectified information.

Step 6 –  E-verify Your Response:

• Once uploaded, proceed to e-verify your response using any of the available methods (e.g., Aadhaar OTP, net banking, etc.).

Step 7 – Responding by Disagreeing with the Notice:

• If you disagree with the department’s assessment, select “Disagree“.
• Explain your reason for disagreement clearly and concisely in the provided text box.
• Double-check your explanation for any errors.

Step 8 – Submit Your Disagreement:

• Tick the box confirming “Response cannot be modified after submission” and click “Submit“.

Consequences of Not Responding to Notice 139 (9)

Ignoring a Notice 139(9) the Income Tax Department issued for a defective return can have significant repercussions. Here’s a breakdown of the potential problems you might face:

1. Invalid Return: If you fail to address the identified defects within the stipulated timeframe (or any extension granted), your original return gets treated as invalid. Essentially, the tax authorities disregard the information you initially submitted. This could lead to delays in processing your tax filing and potentially missing out on any refunds you might be entitled to.

2. Assessment Based on Errors: The tax department might proceed with the assessment based solely on the information available in your defective return. This can be problematic because the errors or missing information might lead to an inaccurate assessment. You could end up with a higher tax liability than you actually owe, or miss out on deductions and benefits you’re eligible for.

3. penalties and interest: Failure to respond or rectify the defects can attract penalties and interest charges. The exact amount depends on the nature and severity of the errors, but it can add a financial burden on top of any potential tax liability.

4. Loss of Deductions and Benefits: Incorrect or incomplete information in your return due to unaddressed defects can lead to the denial of deductions, exemptions, or other tax benefits you might have been entitled to claim. This can significantly increase your tax burden.

5. Increased Scrutiny: Ignoring Notice 139 (9) can raise red flags for the tax department. They might subject your future tax filings to closer scrutiny, increasing the chances of audits or investigations. This can be a time-consuming and stressful process.

Can I file the fresh ITR return for AY after I receive the notice?

Yes, you can address the notice by filing a revised return if the deadline for the relevant assessment year hasn’t passed. Otherwise, respond to the notice under Section 139(9) to rectify discrepancies. Failing to respond can make your return invalid.

Response to Defective Notice 139(9)

FAQs

Response to Defective Notice 139(9) – FAQs

1. What is a Defective Return?
A return may be treated as defective on account of incomplete or inconsistent information in the return or in the schedules or for any other reason.

2. How do I know if my return is defective?
If your return is found defective, the Income Tax Department will send you a defective notice under section 139(9) of the Income Tax Act via an email on your registered email id or post and the same can be viewed by logging in on the e-filing portal.

3. Can I update or withdraw my response after submitting the response on the e-Filing portal?
No, you cannot update or withdraw your response once submitted.

4. Can I authorise another person to respond to my Defective Notice?
Yes, you can authorize another person to respond to the defective notice u/s 139(9).

5. Can I correct the defect in the ITR Form online?
Yes, you can submit the response by online correcting the defect in the ITR Form.

6. What is the time limit within which I can respond to a Defective Notice sent by Income Tax Department?
If your return is found defective, you will get 15 days of time from the date of receiving the notice or as the time duration specified in the notice to rectify the defect in the return filed by you. However, you may seek Adjournment and request for an extension.

7. What if I don’t respond to a Defective Notice?
If you fail to respond to the defective notice within stipulated period then your return may be treated as invalid and therefore consequences such as penalty, interest, non carry forward of losses, loss of specific exemptions may occur,as the case may be in accordance with the Income Tax Act.

8. I have been notified about defective returns u/s 139(9). Can I file the return again as fresh return for that assessment year?
Yes, You can either file the return as a fresh/ revised return incase the time provided for filing the return in a particular assessment year has not lapsed or alternatively you can also choose to respond to Notice u/s139. However, once the time provided for filing the return for a particular assessment year has lapsed, you will not be able file the return as a fresh/ revised return and you will have to respond to Notice u/s 139(9). If you are unable to respond to the notice, the return will be treated as invalid or not filed for that assessment year.

9. What are some of the common errors that make a return Defective?
Some of the common errors that make a return defective are as follows:

• Credit for TDS has been claimed but the corresponding receipts/income has been omitted to be offered for taxation,
• The gross receipts shown in Form 26AS, on which credit for TDS has been claimed, are higher than the total of the receipts shown under all heads of income, in the return of income.
• Gross Total Income” and all the heads of income is entered as “nil or 0” but tax liability has been computed and paid.
• Name of taxpayer in ITR does not match with the “Name” as per the PAN data base.
• Taxpayer having income under the head “Profits and gains of Business or Profession” but has not filled Balance Sheet and Profit and Loss Account.

Response to Defective Notice against Updated Return FAQs

Question 1: I filed an Updated ITR u/s 139(8A). I received a defective communication against the same. How to respond against such defective notice ?

Response: Tax payer can submit response against the defective notice triggered against updated return in the same manner as 139(9) by navigating through below path : https://www.incometax.gov.in/iec/foportal/ → Login → Pending actions → e-proceedings → submit response by selecting respective notice.

Question 2: While preparing XML/JSON for submitting response to defective notice triggered against updated return filed u/s 139(8A), which section dropdown should I select in ITR ?

Response: Tax payer is required to select section as 139(8A) while responding to defective notice triggered against 139(8A) section in ITR.

Question 3: Is it mandatory to fill “DIN” and “Date of Notice” while submitting responding to defective notice triggered against “updated return filed u/s 139(8A)”?

Response: It is not recommended to enter DIN and Date of Notice.

Question 4: Can I submit response to defective notice triggered for any other ITR apart from the filed u/s 139(8A) by selecting 139(8A) and vice versa ?

Response: No. While submitting response to defective notice triggered against “any other ITR apart from 139(8A)”, tax payer should select section as 139(9) and while submitting response to defective notice triggered against 139(8A) return, tax payer should select section as 139(8A).

Question 5: Can I submit multiple responses to defective notice triggered against Updated return filed u/s 139(8A)?

Response: No, tax payer should submit only one response against one defective notice.

Question 6: I didn’t file any prior ITR apart from 139(8A) for AY 20XX. While preparing XML/JSON for submitting response to defective notice triggered against updated return filed u/s 139(8A), which option should I select in A5 of Part A General 139(8A) ?

Response: Tax payer should select same option in“A5 of Part A General 139(8A)” as what he selected while filing 139(8A) ITR which means, if tax payer didn’t file prior ITR u/s 139(1)/139(4), then answer for A5 will be “No” in both return i.s.,139(8A) return and in response to defective notice triggered against 139(8A) return and so no need to fill “Original Date of filing” and “Acknowledgement number” of Original ITR in both the returns.

Question 7: I filed prior ITR apart from 139(8A) for AY 20XX. While preparing XML/JSON for submitting response to defective notice triggered against updated return filed u/s 139(8A), which option should I select in A5 of Part A General 139(8A) and which details need to be provided in “Original Date of filing and Acknowledgement number” fields ?

Response: Tax payer should select same option in“A5 of Part A General 139(8A)” as what he selected while filing 139(8A) ITR which means, if tax payer filed any prior ITR u/s 139(1) / 139(4) apart from 139(8A), then answer for A5 will be “Yes” in both return i.e.,139(8A) return and in response to defective notice triggered against 139(8A) return and so he needs to fill same “Original Date of filing” and “Acknowledgement number” of such previously filed Original ITR in both the returns.

Question 8: I filed updated return u/s 139(8A) and post that I submitted response to defective notice triggered for other than 139(8A) which is pending from long time. Which one will be considered as latest?

Response: Updated Returns may prevail over other applicable sections . So, updated return will be treated as latest return